Enterprise Nation

Matthew Reed is Sales & Marketing Director of Towergate Risk Solutions. This is a company that offers insurance policies to home business owners. As we’ve had a number of questions on this topic recently, we thought we’d turn to Matthew for some answers. 

When someone is starting a business from home, do they need to inform their insurance provider?

When setting up your home based business you should contact your insurance company.  They will want to know the nature of your business to establish whether this represents a greater risk to the insured property.  For instance you may have a number of visitors to the property or hold an amount of stock which could pose a greater theft or fire hazard.  A typical home insurance policy would also exclude liability for any business visitors to the home.

A general rule with insurance companies is that it is better to inform them up front about the facts rather than waiting until the point of making a claim.  The last thing you would want for your business is for an insurance company to withhold payment on your fire damaged house, because you didn’t reveal a material fact about your home based business.

What kind of extra insurance should home businesses consider – over and above basic residential insurance?

Your insurance company is going to be concerned with what technology and other equipment you have in your house for the business.  Many domestic policies may have restrictions on equipment owned by your business but you should notify your insurance company to establish if additional equipment cover is required.  If you are keeping extra stock you will also need stock cover.

Being home based, you may wish to recruit staff including your spouse as the business grows.  It is therefore a legal requirement for your home business to have employer’s liability insurance in place.  This covers employers for any sum which they may be legally be liable to pay an employee in respect of injury, disease, illness or death caused during employment.

Why isn’t there an insurance company offering a standard ‘buy in a box’ home business insurance package that covers keeping stock/IT equipment at home and professional indemnity?

There are some specialist home based businesses insurance but these are not particularly widespread.   There are many hundreds of thousands of different types of firms which makes a “one size fits all” approach hard to achieve.  It’s just as easy to speak with your local insurance broker who will be able to offer sound advice.

What is the best product on offer from Towergate for this sector?

Our specialist household insurance includes an extension for home workers.  This provides cover for loss of damage to office equipment, supplies and furnishing if you work from home in a clerical capacity and can include receiving business visitors to the home.  This policy extension also includes cover for sample stock up to £1000 while in the private dwelling.

Are you seeing an increase in the number of people requesting insurance for their home based business?

We are seeing an increase in certain areas such as consultants and alternative therapists working from home.

Why should home businesses buy from Towergate?

Many people take home business insurance for granted thinking that their traditional buildings and contents insurance will provide cover for their business. Home business owners need to ensure they are fully covered for every eventuality including loss of stock through to an employee fatality which may make them and their business liable.

There is no substitute for seeking professional advice and it is a worthwhile investment of your time.  Our brokers provide a local and trusted service in offices across the width and breadth of the UK.  They can offer home workers specialist advice on the type of insurance cover you require to meet the needs of your business.  You can find details of your local TRS office by clicking on the link below.

• Towergate.co.uk